How TalentX plans to rule TikTok, starting with 32 influencers and a Los Angeles mansion

• After signing six of the biggest stars on TikTok, TalentX Entertainment has grown its talent roster to 32 influencers that it's promoting across Instagram, YouTube, Snapchat, and TikTok.
• Founded in 2019, the 12-employee talent management company is poaching new hires from Otter Media's social content business, Fullscreen, a subsidiary of AT&T's WarnerMedia.
• TalentX is exploring a variety of revenue streams, including brand partnerships, live events, and TV and film development work.
• The company's TikTok "collab house," Sway LA, is also making waves alongside Hype House as a content creation hub.
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When YouTube first emerged as the key revenue platform for a new generation of video creators, an entire industry of talent managers sprung up to promote and help its top stars earn money (while taking a cut).

Now, as TikTok battles to become the next big video hub for creators young and old, some prominent YouTubers are making sure they get in on the action by building their own talent management businesses centered around the new short-form video platform.

First, YouTube creator and former Vine star Brent Rivera started Amp Studios, a content studio and talent incubator that works with popular TikTokers, scoring sponsorships with big brands like Pop-Tarts, Netflix, and Electronic Arts.

And now a pair of YouTubers, 23-year-old Tal Fishman and 22-year-old Jason Wilhelm, are launching TalentX Entertainment, a new management company built for the TikTok age.

TalentX has recruited 32 TikTok and YouTube stars and launched the Sway House, a TikTok creator "collab house" in Los Angeles. It has also assembled a 12-member team of influencer marketers, poaching several employees from Otter Media's Full Screen, a subsidiary of AT&T's WarnerMedia.

In addition to Fishman and Wilhelm, who serve as co-CEOs, the company brought on Fullscreen's former director of creator partnerships, Warren Lentz, to serve as its chief revenue officer. It hired Michael Gruen as its vice president of talent, and brought on one of TikTok's biggest creators, Josh Richards, as a partner.

TalentX is eyeing cross-platform brand partnerships, merchandising, product and intellectual property deals, live events, and television and film development. But for now, it's focusing on managing its slate of young stars, most of whom have ambitions that extend well beyond TikTok.

"These guys are the next generation of YouTubers, like it or not," Gruen told Business Insider. "When you put a video with their name in the headlines, they're going to get a 100,000 views. It's a phenomenon that no one's taking advantage of."

Unlike YouTube, which offers straightforward monetization through Google-placed ads, TikTok is still a bit of the Wild West when it comes to building stable revenue streams. TikTokers earn money from livestreams, sponsored posts, and fees from musical artists for song integrations. But helping TikTok creators get big paydays often requires moving their audiences off of the app and to other platforms - like YouTube and Instagram - which have more established economic ecosystems.

TalentX wants its stars on all platforms, not just TikTok

"Almost all of our talent right now have their primary audience on TikTok," Lentz said. "That does not mean we're going all in on TikTok. It means we're going to partner with our talent and teach them and help them get on every other platform."

It's a lesson they learned first from YouTube.

Fishman started his Reaction Time YouTube channel in 2015, growing a fan base on YouTube with close to 15 million followers. But the TalentX co-CEO said he discovered that relying on a single platform for revenue made him vulnerable.

"I kind of put all my eggs into one basket and only monetized on YouTube through Adsense," he said. He doesn't want that to happen to the TikTok stars he manages.

"We are day-to-day with these guys on growing their YouTube, not just their TikTok, and also their Instagram, because we know how important it is to create those different revenue streams and different revenue buckets," he said.

And it's not an idle concern.

When TikTok changed its policies so that only creators above the age of 16 could livestream to their audiences, and requiring parental permission for users between the ages of 16 and 18, it took away a big source of revenue for a lot of TalentX's teenage talent, Fishman said.

During a livestream, TikTok users can send a creator virtual "gifts" using a currency of TikTok's own invention, "coins." Creators can then convert these "gifts" into "diamonds," which are then transferable into real dollars.

Fishman helped his teen stars find other revenue streams.

He and fellow YouTuber Nick Bean, who serves as creative director at the Sway House, have been making sure TalentX's creators get set up correctly with YouTube monetization as they push to diversify their talents' incomes.

"With us, since we already have systems in place and I have five years of experience in the space, it's very easy to streamline," Fishman said of getting the TalentX team set up on YouTube.

But brands are still asking for influencer marketing campaigns on specific social-media platforms

Even if TalentX is thinking about its creators holistically, that doesn't mean brands are.

"Most brands when they come to us and want to do influencer marketing spend, they typically have one platform in mind, whether it be YouTube, Instagram, or TikTok," Lentz said.

TalentX focuses on those three platforms and Snapchat for sponsored content, he said. The cost-per-view for a sponsored post on TikTok is cheaper than on YouTube because it's much easier to scale on the new app, Lentz said. TalentX charges a cost-per-view of between three and eight cents on YouTube and one to two cents on TikTok.

Instagram requires a different approach.

"They're buying the Story views or the Feed views and impressions," he said. "Some brands are much more nuanced than others and really know what they're seeking and they have a strong idea of how they're going to measure their ROI [return on investment]. Other brands actually turn to us as their consultant and they ask us what we feel is the most effective."

The single metric that brands track across the board is engagement, according to Lentz. Followers and subscribers do not matter.

"Some of our influencers, which we're very excited about, are averaging anywhere from 25 to 50% [engagement], meaning if they have 500,000 Instagram followers, they're getting upwards of 250,000 likes per post, which is unheard of and unprecedented."

TalentX is partnering with the Miami, Florida-based agency, The Influencer Marketing Factory, to serve as its in-house social agency. Lentz said the company is actively negotiating with other agencies to offer its expertise on TikTok marketing.

"For the past year when I ran talent partnerships at Fullscreen, most of the brands were spending primarily on YouTube and Instagram," Lentz said. "In 2020, there are a lot of brands, specifically those in the direct-to-consumer space or the tech and mobile app space, that are excited to really dip their toes into influencer marketing on TikTok."

TalentX wants its clients on the road - when school's out

Because many of TalentX's top creators are still students, the company said it's waiting for the summer to put its talent on the road.

"Touring is going to be really important for us this summer when a lot of our talent clients as well as their audiences are not in school anymore," Lentz said.

The company has three tours planned right now. It hopes to leverage its relationship with its board member Larry Rudolph of music management group, Maverick Management, to connect with Live Nation Entertainment on other event opportunities, Gruen said.

TV and film development deals are on TalentX's wish list

Some of TalentX's creators have Hollywood ambitions, and the company said it's in the early days of exploring development deals with agencies like the Creative Arts Agency and WME, where Lentz once worked as an assistant.

As a first step, the company is setting up acting classes for some of its influencers to get them ready for larger screen performances.

"We are currently working closely with each of them to get them in acting classes, because ultimately that craft is something that requires a lot of hard work," Lentz said.

For more on how TikTok stars are building a business on the app, check out these Business Insider Prime posts:

• How a pair of 30-year-old video producers turned TikTok from a side gig to their main job: 30-year-old Greg Auerbach and his childhood friend Nate Twer are building a business making funny videos on TikTok. The pair have 590,000 followers and nearly 14 million likes on the app.
• A college TikTok influencer with 1.6 million followers explains how much money she makes - and her 3 main sources of income: Cosette Rinab has 1.6 million followers on the app and said that she splits her time between studying film and public relations for school and growing her page.
• A TikTok star with 1 million followers explains the ways she earns money and how much she makes: The 22-year-old TikTok star Salina, who goes by "Salinakilla" online, explained the different ways creators earn money through the popular video app.
• Marketers share what it's like to use TikTok's invite-only tool for finding the right influencers to hire for brand deals: Business Insider spoke to marketers who are beta testing TikTok's new matchmaking tool for influencers and brands, "Creator Marketplace."